The UK Debt Management.........>

GILT AUCTION PREVIEW: The UK Debt Management Office (DMO) re-open 40-year 1.75%

July 2057 Gilt Thursday for Stg2bln in size.

- BACKGROUND: This will be the fourth re-opening of the Jul-57 Gilt with the

last one being in Apr 10 and is not scheduled to be tapped again this quarter.

There is currently Stg14.25bln outstanding. There is a redemption payment of

Stg31.1bln (ex BoE) and coupon payments worth Stg3.5bln due on Monday which is

seen supporting today's auction.

- RV: On an outright basis the Jul-57 Gilt yield has richened by around 5bps

since its last auction on Apr 10, but has cheapened by nearly 4bps from

Wednesday's low. Citi says that the Jul-57 Gilt looks cheap in the sector and on

the 30s/40s/50s fly. Compared to swaps Citi says the Gilt looks better value

than the Jan-60 Gilt. While on a cross market basis the 40-yr Gilt looks

historically cheap versus French OATs Citi says.

- HISTORY: Back on Apr 10, the DMO allotted Stg2.185bln at average yield of

1.661% with cover of 1.98 times and tail of 0.4bp.

- TIMING: Results are due to be announced around 0935GMT.